Retail spends on social media as e-commerce growth slows

The explosive growth of e-commerce sales in retail will slow over the next few years but nearly
a third of European retailers will invest in social media tools to support customers’ online buying
habits, according to IDC Retail Insights.

The specialist retail arm of analyst firm IDC said the number of people shopping online and
high-speed internet penetration will approach saturation point in the near future. This will
inevitably slow e-commerce growth rates and force retailers to focus on strategies to increase
their share of online sales as well as increase international presence.

Social media is a means of improving customer experiences, which will increase the rate at which
visits to websites convert to sales.

Christine Bardwell, research manager EMEA at IDC Retail Insights, said 30% of European retailers
plan to introduce social media tools in the next two years.

"Even in the more mature online markets, retailers today can expect online retail sales to
outgrow store sales growth two or three times over. However, as the number of online shoppers and
high-speed internet penetration nears saturation, online growth will slow significantly and
retailers will be required to build a two-pronged strategy — internationalisation and improving
conversion rates by focusing on the online customer experience."

"It is clear from our recent discussions that retailers are keen to learn more about e-commerce
with the growing importance of accessibility, fully integrated user experience, and ease of use in
the online sales channel.”

Businesses can use social media already available or use software to give them more control of
it. Indian IT service provider Infosys, for example, has introduced a platform which aims to
industrialise social media.

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